I am a research fellow at the Hoover Institution, at Stanford, and the Cullen Professor of Economics at the University of Houston. I am also a research professor at the German Institute for Economic Research Berlin. My specialties are Russia and Comparative Economics, and I am adding China to my portfolio. I have written more than 20 books on economics, Russia and comparative economics. I blog at paulgregorysblog.blogspot.com.

Making Sense of China's Bo Xilai Earthquake

The removal of Chongqing party boss Bo Xilai from the Politburo and the announcement that his wife is under investigation for murder are a political tsunami, the likes of which have not been seen in China since the defeat of the Gang of Four shortly after Mao’s death. Bo’s removal dispels the myth of party unity on which its claim to legitimacy rests. It shows the public that corruption is not limited to the local level where ordinary people encounter it. For the West it destroys the myth of a “deft” and “nimble” party masterfully navigating society and the economy through troubled waters.

To put this in perspective: Bo’s fall is the equivalent of a RFK III and George W. Bush II announcing that Richard Daley III has been banned from politics for life and his wife, Amanda Cabot-Lodge-Daley, has been placed behind bars. All the players are the sons and daughters of the Maoist elite, many survivors of the Long March. Bo had been expected to be promoted to the elite standing committee of the Politburo, where he could have become a contender for the top position as general secretary of the CPC.

The true story behind Bo’s fall will perhaps become known with the passage of time, but here is what can be pieced together from news accounts and from the Chinese rumor mill:

Most of China’s current top leaders suffered during Mao’s Cultural Revolution, including Bo’s father, Bo Yibo, a Mao hardliner. This shared experience frightened the post-Mao leadership into making economic and political reforms, the most important being term limits on top positions. The top leadership is scheduled to be replaced at the 18th Party Congress later this year. This will be the fifth post-Mao succession. So far, retirees have been treated well with full honors and privileges.

Bo Xilai became known as a rising star as head of Dalian City, governor of Liaoning Province, and commerce secretary. Bo’s ambition and career trajectory did not sit well with the top leaders, who feared his ruthlessness. During the senior Bo’s public trial, Bo denounced his father and beat him in public so hard that he broke three of his ribs. In this way, Bo proved his loyalty to Mao and the party. What’s more, his savvy father later praised him for doing the right thing. With their own retirements forthcoming, brutal and opportunist Bo seemed dangerous to have in a top leadership position. He could sacrifice them as he had his father.

China’s leaders decided to put Bo out to pasture in backwater Chongqing before he rose further. A 2007 cable from the US embassy, made available through wiki leaks, hinted at Bo’s problems with the more liberal power structure in Beijing:

“Luo predicted in our November 9 discussion that Minister of Commerce Bo Xilai’s expected (and since announced) move to Chongqing to become Party Secretary will be his final career move. While Bo may serve two terms, he will not be promoted higher.”

Bo did not give up his ambitions. Instead he launched a populist campaign to put mega-city Chongqing on the map. He initiated a popular campaign against organized crime (whose services he used himself at times) and cemented his credentials with the CPC’s ultra-left wing with his “sing revolutionary songs” campaign. His anti-Mafia campaign led to thousands of arrests and jail time, along with the execution of crime bosses and party members. The public applauded. His popularity spread beyond the borders of Chongqing. No one in Beijing was to thwart his ambitions.

In a party where political ambitions are rarely made public, Bo’s flagrant showmanship created cracks in the normally serene party façade, pitting leftist Bo against the liberal party boss Hu Jintao and prime minister Wen Jiabao. They became increasingly concerned as party leaders trekked to Chongqing to observe first hand Bo’s handiwork. Bo boasted in a press conference that both Hu and Wen would one day come to Chongqing to see first hand his great political model. The father of the scheduled new leader, Xi Jingping, had borne the brunt of the party faction struggle and feared Bo. The ultimate affront was Bo’s announcement during the November ASEAN conference that he was holding a military exercise in Chongqing, sending Chinese delegates scurrying home from Honolulu. Back in Beijing, China’s leaders decided they had enough of Bo.

Normal CPC practice is to discredit wayward party members through their subordinates. The weak link in Bo’s case was his political right hand man, Wang Lijun. As Bo’s police chief and deputy mayor, Wang had the dirt on Bo, which Beijing wanted. After a stormy meeting with Bo, Wang was demoted. Four days later Wang fled to the U.S. embassy armed with documents and asking for asylum. Various rumors about the falling out include a corruption investigation into Bo’s family and the mysterious death of an English business man associated with Bo’s wife. Wang purportedly fled after two of his associates mysteriously disappeared. After approximately 24 hours inside the US embassy, Wang left directly for Beijing of “his own volition”. Outside the embassy Bo’s forces and State security officers stood face to face in an apparent show down, which caused large media interest and public scandal. Wang purportedly told American officials that Bo’s wife had plotted to poison Mr. Heywood, and turned over a substantial police file.

As party leaders huddled in Beijing, Bo was notably absent from key meetings. The leaders had to decide whether to allow Bo to remain in a largely ceremonial position or publicly purge him. Wen Jiabao’s March 13 remark: “without successful political reform, it’s impossible to carry out economic reform,” was believed to be directed at Bo. On March 15, an official announcement stated “Zhang Dejiang has been appointed Party chief of Chongqing, replacing Bo Xilai, according to a decision of the Communist Party of China (CPC) Central Committee,” with no further explanation. On April 6, the government closed down a leftist website “Utopia” and admonished the military through the Liberation Army Daily to ignore rumors and remain loyal to President Hu.

The axe fell today, April 10. Chinese state media reported that Bo was suspended from the party’s 25-member Politburo and its 300-member Central Committee, on suspicion of “serious disciplinary violations.” In a separate dispatch, state media reported that Bo’s wife had been transferred to judicial authorities on “suspected crime of intentional homicide” in the death of Neil Heywood.

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We should never have assumed that all the fanatics and killers of Maos “Cultural Revolution” simply went away. Mr. Bo had apparently developed a new rallying ground for them over the years. Removing him from office was no doubt the right step. Only time will tell whether it came far too late.

It makes sense that the Maoist hardliners would have rallied around Bo, the son of one of the “Eight Immortals” of the Revolution. Obviously Bo harbored a master plan for the party congress next Fall, and obviously his deputy Wang leaked it. The question remains whether Bo was removed soon enough.

The case of Bo Xilai shows that officials should not overestimate their personal influence in China, or they will have the illusion of being above Party discipline and the law. when it comes to problems, China solved it in line with the law.